This formerly stellar conservative
ETF was off 8.61% YTD before today. With a slight .11% gain today, it’s still down 8.5% YTD. I’ve long watched it; owned it briefly earlier this year before discarding it. The fund allocates 30% to equities and 70% to fixed income. For comparison, after today the Dow Jones is down only about 3.5% YTD and the S&P about 6.4%.
What’s the point here? Only to demonstrate the remarkable degree of carnage the bond avalanche has wrought upon previously fine funds with a reputation for “preserving capital”. - Yeah.
Question? What does the future hold for AOK and a whole legion of formerly considered “safe” funds with similarly heavy fixed income / bond holdings? Do you ever expect them to recover their former safe haven status? Get back to “break-even”? When might that be? I haven’t looked at target date funds, but must assume that those structured for capital preservation (late in life investors) have probably lost more this year than their more aggressive brethren.
Comments
I use a tri-fund tracker equally weighted among AOK, PRSIX and ABRZX. The only one I own is ABRZX which has significant commodity exposure. Beating the tri-fund tracker has been easy this year. But RIO, which I own, has turned south lately. So if commodities roll over and bonds recover some earlier losses, than the tracker should outperform.
5 members of this Series are shown YTD (reset if defaults to 1 year) in Stockcharts and note the sharp mid-March dip, https://stockcharts.com/h-perf/ui?s=FASIX&compare=FAMRX,FASGX,FASMX,FTANX&id=p08325402070
The TRP funds I’ve sometimes used (PRSIX, TRRIX) don't adjust holdings - other than maybe some subtle market calls on TRP’s part.
I like yogi’s suggestion. On the other hand, there’s something to be said for using funds you have owned before or which are run by a manager you’ve had a lot of experience with.